In recent years, voltage stability issues have become a serious concern with regard to the safety of electrical systems, these issues are more evident and have wider consequences in vertical networks with an insufficient reactive power reserve. Pakistan is currently suffering from the worst energy crisis in its history. Owing to an increase in energy demand, the current transmission system is becoming increasingly inadequate. It has thus become necessary to reduce losses and enhance the system voltage profile for more efficient energy utilization. In this study, the main emphasis is on assessing the feasibility of using flexible AC transmission system devices and distributed generation to compensate power failures on the power lines of the Pakistani power transmission system. The load flow and contingency analyses are performed on a 132 kV transmission system that feeds power to the Quetta electric supply company. The region of Baluchistan is studied to evaluate the effectiveness of the proposed method. The system is simulated using NEPLAN, which accurately models the details of all system elements and the optimal power flow. The simulation results indicate that the proposed method helps reduce system losses, voltage deviation, and power flow congestion, with all system constraints within permissible limits.